Relocate LATAM

Tax residency

Leaving Canada cleanly

A plain-language overview of what changes when you stop being a Canadian tax resident — and what the CRA still expects from you on the way out.

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This page is reference material, not advice. The CRA looks at intent and ties — getting it wrong can cost you years of double tax. Always run your specific case past a CPA who handles Canadian + LATAM cross-border returns.

1. What makes you a Canadian tax resident

The CRA cares less about your passport than about your residential ties. You're typically a resident if you keep any of the primary ties:

  • A home available for your use in Canada (owned or rented year-round)
  • A spouse or common-law partner who stays in Canada
  • Dependants who stay in Canada

Plus secondary ties they will consider together: vehicles, bank accounts, credit cards, provincial health card, driver's licence, professional memberships, social ties.

To leave cleanly you sever both. There is also the 183-day rule: if you spend 183+ days in Canada in a calendar year, you can be deemed a resident even without ties.

2. Departure tax (deemed disposition)

On the day you become a non-resident, the CRA treats you as if you sold most of your worldwide property at fair market value and immediately re-bought it. You owe capital gains tax on the unrealized gains.

What is taxed:

  • Stocks, ETFs, mutual funds (held outside RRSP/TFSA)
  • Crypto
  • Private company shares
  • Foreign real estate

What is NOT taxed at departure:

  • RRSPs, RRIFs, RPPs, TFSAs (different rules below)
  • Canadian real estate (taxed when actually sold)
  • Personal-use items under $10,000

File Form T1243 (deemed disposition) and T1161 (list of properties) with your final T1 return. You can elect to defer payment by posting security with the CRA.

3. RRSPs, RRIFs, TFSAs, RESPs

  • RRSP / RRIF — keep them. Withdrawals as a non-resident are subject to a 25% withholding tax (often reduced by treaty — e.g. 15% under most LATAM treaties). No more contribution room accrues.
  • TFSA — keep it, but stop contributing. Most LATAM countries don't recognize the shelter and will tax the income inside it.
  • RESP — government grants stop. Consider collapsing or transferring before departure.
  • FHSA — must be closed if you become a non-resident; you have 1 year.

4. Provincial healthcare

Provincial coverage (OHIP, MSP, RAMQ, etc.) generally ends after 6–7 months outside the province. You must enroll in international health insurance before departure — and you'll need it again if you ever move back, since most provinces impose a 3-month wait on returning residents.

5. The CRA paperwork checklist

  • Final T1 return marked Date of departure
  • Form T1243 — deemed disposition of property
  • Form T1161 — list of properties owned at departure (≥ $25,000)
  • Form NR73 — optional residency-status determination (use carefully — it locks in CRA's view)
  • Form NR6 if collecting Canadian rental income as a non-resident

6. Practical sequence (12-week countdown)

  • Week 12 — Book CPA + immigration consult. List all assets & ACBs.
  • Week 8 — Sell or transfer non-registered investments where the gain is small (lock in low departure tax).
  • Week 6 — Cancel provincial health card on departure date, secure international policy.
  • Week 4 — Cancel non-essential ties: gym, clubs, professional memberships, magazine subs.
  • Week 2 — Sell or store the car, end the lease, forward mail to a non-Canadian address.
  • Departure day — Note the date. This is your deemed disposition date.
  • Following April — File your final T1 with T1243 and T1161.
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